Stream Global can't find room in Apple Valley

Apple Valley has been unable to find office space large enough for Stream Global Services, a tech support firm that announced in March that it would relocate its world headquarters to the city.

"Stream has informed us that at this time the building they need does not exist in Apple Valley," said a statement released by Community Development Director Bruce Nordquist. He said the city continues to seek a suitable space for a headquarters and call center. The headquarters was expected to bring 25 jobs to the city, with the possibility of hundreds more if the company opens a call center in the city.

He said the company remains committed to finding a location in Apple Valley. But that commitment was less clear in a statement released last week by Joe Thornton, senior director of brand management at Stream:

"Based on the demand for our services, we have not found a suitable facility in Apple Valley that would meet our needs for our corporate headquarters and service center. We are looking for facilities that will support our growth needs longer term."

Asked whether Stream is still looking in Apple Valley, Thornton replied: "We still are exploring options in Apple Valley, but not exclusively in Apple Valley."

Stream's decision to move to Apple Valley was announced with much fanfare at a luncheon attended by 150 people in March.

"I believe our community will have a tremendous positive impact from Stream Global Services," Mayor Mary Hamann-Roland said after making the announcement. "I look for a good partnership for a very long time."

Stream's CEO, Kathy Marinello, who lives in Apple Valley, said after the announcement that the company was moving from a Boston suburb because "Apple Valley is a great place and has great resources."

Hamann-Roland said Thursday that she and city staff met with Marinello on June 14 and were assured that Stream still intended to find space in Apple Valley, eventually for 600 or more employees. Hamann-Roland said Stream wants to be on or near the Cedar Avenue bus rapid-transit line under construction. Although Stream didn't find adequate space in existing buildings, the city does have open space for a new building along or near Cedar, Hamann-Roland said.

"We are doing all we can to make it successful," Hamann-Roland said. She said the city will meet with Stream again next week.

Stream, which has a temporary corporate office in Bloomington, had been negotiating a lease for downtown office space at the aging Time Square shopping center. Nordquist said Stream also had sought additional space in the Wings Financial building across Cedar Avenue from Time Square, which sits in the northwest corner of Cedar and County Road 42. "They came to the conclusion that Time Square was not big enough for what they need," Nordquist said.

About $2.4 million in forgivable loans had been offered to help Stream relocate to Apple Valley. That included a $1 million loan that is still available from the state Department of Employment and Economic Development, Nordquist said.

The other $1.4 million was city money to help remodel the aging Time Square, Nordquist said.

He said that money would have come from excess taxes raised in a nearby tax increment financing (TIF) district. But the TIF business assistance loan, under state law, had to be allocated for work started before July 1. That money will no longer be available to Stream, Nordquist said.

Apple Valley and other cities had sought legislation this session to extend a law into 2013 that allowed cities to use excess taxes generated in a TIF district for construction or roadwork outside the district, Nordquist said. But the 2013 extension was part of an omnibus tax bill vetoed by Gov. Mark Dayton. The extensions, enacted in 2010 and 2011, were aimed at creating construction jobs in a slow economy.

Apple Valley could lose most of the $1.4 million if it doesn't find a project within the TIF district, said city finance director Ron Hedberg. He said one possibility is buying land to add left turn lanes and at the intersection of Flagstaff Avenue and County 42, for which a cost estimate is underway. If a suitable project isn't found, the excess taxes would revert to Dakota County.

Stream says it employs more than 30,000 people in 22 countries. They assist clients' customers by answering questions about technical, computer, financial, billing or other matters over the phone or Internet.